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Modes of Exporting Services |
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Friday, 21 November 2008 07:17 |
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The traditional cross-border trade definition for goods, that goods are traded when they are sold to one country originating from another, is not adequate in relation to services.
Mode 1Cross Border Supply is when a service is provided from one country to another but neither the service provider nor the consumer leaves their respective country. This service van be transacted over the phone, fax, internet or through the mail. On-line consulting is an example of cross border supply.
Mode 2Consumption Abroad is when the consumer travels to another country to consume the service. An example of this is tourism. When a tourist visits Barbados and stays in a hotel, takes a taxi, gets a haircut or takes a safari tour of the island, the Barbadian service provider is exporting services.
Mode 3Commercial Presence is when a company sets up subsidiaries or branches in another country to provide services. For example, Solar Dynamics, a Barbadian company has set up a branch in St. Lucia.
Mode 4Presence of Natural Persons is when the service provider travels, on a temporary basis, from their country to provide a service in another country. For example, if an entertainer travelled from Barbados to Japan to perform.
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